2012-2016 Overview of Chinese and American Film Markets：China catches up fast, while North America sees a slight fluctuation
Compared to 2012, Chinese box office grew by 168% in 2016, the number of screens increased by 214% and the number of admissions raised by 197%. In 2016, the American box officeincreased by 5% and the number of screens and admissions grew by 3% and reduced by 3%, respectively, compared to 2012.
In 2016, the number of Chinese screens reached 41,179, surpassing 40,759 screens in the USA and ranking top in the world.
In 2016, the admissions in Chinese film market reached 1.372 billion, surpassing 1.315 billion admissions in the USA and jumping to the first position in the world. The annual per-capita admission is one time in China with a population of 1.37 billion, while this figure is 4.1 in the USA with a population of 320 million, projecting huge growth potential of Chinese box-office market.
In 2016, Chinese box-office market saw a slow growth at 4%, while, compared to 2014, the YoY growth rate was 48% in 2015. It is illustrated that the original development model of Chinese film market encountered some bottlenecks and it is necessary to explore new growth engine, of which co-productions are an option.
Status-quo of co-productions: With the output and box-office increased year by year, Sino-US co-productions are actively deployed
- The number of co-productions applied and approved and the share of box-office revenues keep growing year by year. The YoY growth slowed down in 2015-2016 and the number of screened films was reduced in 2016.This may be related to the macro-environment in Chinese movie market and the investment return ratio of co-productions.
- Sharing the same language, the Mainland, Taiwan and Hong Kong are still the major forces for production and consumption of co-productions. As the second largest box-office earners, China is actively exploring the cooperation mode with the USA/Hollywood, the largest box-office earners in the world. Meanwhile, China is expanding the co-production partnerships with other countries.
Status-quo of Co-productions:Investment return is not good despite large influence on box-office
- In 2016, nine of top 20 highest-grossing films were co-productions, showing the strong influence of box-office.
- Films co-produced by China mainland and Hong Kong continuously occupy the highest-grossing list. However, China Mainland and Hong Kong co-produced films continue to produce sequels, explore old IP and leverage the value of existing celebrities, lacking innovation.
- Sino-US co-productions embrace an ear of large investment. However, despite large investment at 100 million, the return is not optimistic.
- Due to cultural differences between China and western countries, Sino-US co-productions suffer from the deficit featuring both poor box-office performance and reviews revenues.
- In 2016, co-productions performing well in word-of-mouth and box-office are: Kung Fu Panda 3 (China and the USA), Operation Mekong and Soul Mate (China Mainland and Hong Kong)
Status-quo of Co-productions: Still attractive to foreign and Chinese capital although the profit couldn’t be guaranteed
Latest Performance Review: Chinese Movie Market in 2017 Q1
- Imported films realized about 50% of total box office revenue with quantity accounting for one-fourth of total films in China, which realized box office revenue of RMB300 million on average.
- Co-productions presented favorable performance. Eight co-production films accounted for nearly 30% of the box office sales in 2017 Q1. They realized brilliant revenue of RMB450 million on average.
Latest Performance Review: 2017 Q1 Box Office Top 20 Analysis
- In 2017 Q1, percentage of box office sales of three categories of films among TOP20 was similar to that in Q1. Imported films accounted for 50%, domestic films presented the lowest proportion (more than 2%), and co-productions ranged between the above categories (i.e., 27-28%).
- In TOP20 list, imported films were still the main force of the box office production. 12 imported films evenly distributed in top, middle and bottom, which generated over 50% of the box office sales, with the average single box office sales of RMB530 million.
- Only three co-productions were included into 2017 Q1 box office TOP20 list, but two of them ranked 1st and 2nd, accounting for a large proportion of the box office sales. Three co-productions were not released in the Spring Festival holiday when imported films contended. It can be seen that the Spring Festival had positive effects on the non-imported film box office sales.
- Five domestic films were listed in list of film box office revenue up to RMB100 million in 2017 Q1, which accounted for 20% of box office sales. It is worth noting that these five domestic films were also released in the prime Spring Festival holiday. Contribution of special schedule on box office amount can not be ignored.
- Among Top20, imported films got average score of 7.2. This proved their outstanding quality, high audience satisfaction and enhanced willingness to pay for film appreciation.
- Co-productions and domestic films got the scores of about 5, and co-productions got slightly higher score. This proved that the production resources (cast/special effects technology, etc.) of co-productions are still slightly more than those of domestic films. In general, co-productions and domestic films should improve the quality.
Latest Performance Review: A Close-up on Co-productions
- China’s film market released a total of 87 films in 2017 Q1, including eight co-productions, accounting for 9% of the total number of films. As for box office ranking of these co-productions, except two films ranked 1st and 2nd during the Spring Festival holiday, the rest were basically distributed at the middle level. They realized box office revenue of more than RMB3.6 billion, accounting for 27.6% of the total box office revenue.
- In 2017 Q1, co-productions got average score of 6.0 on Douban, and they were basically up to standard according to public comment. But good films failed to gain profit, whereas films with poor reputation enjoyed profit.
- In 2017 Q1, co-productions were produced by local compatriots (Hong Kong and Taiwan compatriots). Hong Kong compatriots, who are traditional backbone of co-productions for a long time, continued to infuse fresh blood for the Chinese Mainland film market. They actively explore a variety of cooperation, and find a successful routine to some extent. Whether this routine can keep long-term stability also needs to be expected in the future. Co-productions, produced between China and US and between China and other countries, witness slowdown in promotion progress. Foreign producers tend to redraw blueprints, explore the directions and give the matter further thoughts.
- In 2017 Q1, co-productions still presented gloomy performance, which was also related to rational and calm climate of the Chinese film market.